South Africa’s Shoprite to fast-track African expansion

South Africa’s Shoprite Holdings, Africa’s biggest retailer by sales, will open nearly twice as many stores on the rest of the continent this year as in 2014, chief executive Whitey Basson said on August 18.
The supermarket operator is banking on rapid growth in markets such as Nigeria and Angola where it aims to change the shopping habits of Africa’s rising middle class.
The retailer, which also operates the Checkers grocery chain and OK Furniture, reported a 10.8 percent rise in full-year earnings, buoyed by sales growth of 13.5 percent in stores outside its home market.
It plans to add another 35 stores this year to the 189 it has in the rest of Africa, hoping to improve on the 16 percent contribution that Africa ex-South Africa makes to its profits. Last year it opened 20 stores outside South Africa.
‘It usually takes three to five years for countries to change from pavement shopping to using supermarkets,’ Basson said at a presentation of the company’s results.
Nigeria will get 14 new stores in the next 20 months and Shoprite is building a distribution centre there, aiming to move goods faster as imports into Nigeria can be delayed in ports for up to three months or so, Basson said.
Angola, is the only other market large enough to justify a distribution centre in the next five years, he said.
Hampered in South Africa by power outages, rising electricity costs and highly indebted consumers, Shoprite increased sales in its home market by stealing market share in its food business from rivals.
The retailer, which began as a chain of eight stores in South Africa in 1979 and has had Basson at the helm throughout, now spans 15 countries across the continent, 13 of which posted stronger economic growth than South Africa last year.